Correlation Between China Merchants and Chongqing Sulian
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By analyzing existing cross correlation between China Merchants Bank and Chongqing Sulian Plastic, you can compare the effects of market volatilities on China Merchants and Chongqing Sulian and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China Merchants with a short position of Chongqing Sulian. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Merchants and Chongqing Sulian.
Diversification Opportunities for China Merchants and Chongqing Sulian
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Chongqing is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding China Merchants Bank and Chongqing Sulian Plastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chongqing Sulian Plastic and China Merchants is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China Merchants Bank are associated (or correlated) with Chongqing Sulian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chongqing Sulian Plastic has no effect on the direction of China Merchants i.e., China Merchants and Chongqing Sulian go up and down completely randomly.
Pair Corralation between China Merchants and Chongqing Sulian
Assuming the 90 days trading horizon China Merchants is expected to generate 1.71 times less return on investment than Chongqing Sulian. But when comparing it to its historical volatility, China Merchants Bank is 3.61 times less risky than Chongqing Sulian. It trades about 0.03 of its potential returns per unit of risk. Chongqing Sulian Plastic is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,943 in Chongqing Sulian Plastic on September 12, 2024 and sell it today you would lose (10.00) from holding Chongqing Sulian Plastic or give up 0.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Merchants Bank vs. Chongqing Sulian Plastic
Performance |
| Timeline |
| China Merchants Bank |
| Chongqing Sulian Plastic |
China Merchants and Chongqing Sulian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Merchants and Chongqing Sulian
The main advantage of trading using opposite China Merchants and Chongqing Sulian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Merchants position performs unexpectedly, Chongqing Sulian can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Chongqing Sulian will offset losses from the drop in Chongqing Sulian's long position.| China Merchants vs. Qilu Bank Co | China Merchants vs. Postal Savings Bank | China Merchants vs. Bank of Suzhou | China Merchants vs. Western Metal Materials |
| Chongqing Sulian vs. Lutian Machinery Co | Chongqing Sulian vs. PetroChina Co Ltd | Chongqing Sulian vs. Bank of China | Chongqing Sulian vs. Gansu Jiu Steel |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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